Punjab Chief Minister Amarinder Singh has urged Prime Minister Narendra Modi to review the tax rates imposed on agriculture related goods under the Goods and Services Tax (GST) to provide relief to farmers.
In a letter to the Prime Minister, copies of which were released to the media here, Amarinder expressed concern at the increased rates of taxation under GST on agricultural inputs, including implements and drip irrigation equipment, which had witnessed a hike from 5 per cent under VAT to 18 per cent under GST a hike of a whopping 13 per cent.
Citing data, the chief minister pointed out that while VAT on fertilisers had been 2 per cent, the GST now was 5-18 per cent.
Likewise, from a VAT of 12.5 per cent, tax on insecticides had increased to 18 per cent under the GST regime.
In the case of tractors, VAT had been 6.05 per cent while GST is 12-28 per cent, while the respective figures for mechanical parts were 12.6-14.6 per cent (VAT) and 18 per cent (GST).
Tax on micro nutrients had been doubled from 6 per cent under VAT to 12 per cent under GST, while that on canned food items had increased from 5 per cent (VAT) to 12 per cent (GST), Captain Amarinder pointed out in the letter, adding that the increase ranged from 3 per cent to 21.95 per cent.
Amarinder observed that the agriculture sector was facing unprecedented crisis with falling real farm incomes and mounting farmers debt.
The cost of cultivation was only likely to increase with the implementation of the GST regime with higher taxation levels, further impairing the financial health of the beleaguered farmers, he added.
The chief minister further pointed out that increased taxation levels might hinder the adoption of micro-irrigation technologies under the Pradhan Mantri Krishi Sinchai Yojana, instead of enabling the government to incentivise their adoption to conserve the fast depleting water resources.
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